Central bank chiefs speak and for once, nothing happens

In short

1. The RBA Governor spoke last night about unconventional monetary policy tools
2. The head of the US Federal Reserve also spoke overnight
3. Neither speech moved either the US dollar or the Australian dollar

So what did they say?

Basically, the RBA Governor outlined that

• IF unemployment increases and inflation remains low, they will cut rates before considering anything like Quantitative Easing (QE)
• They won't consider it until interest rates go to 0.25%
• They will not cut interest rates below 0%
• The RBA doesn't not expect to implement QE but if they do, it will be buying government (not private) bonds

Click here for a full transcript of the speech.

Federal Reserve Chairman Jerome Powell gave little new views from the central bank in the US. While the speech had an optimistic tone, it gave little clues as to the future direction of interest rates in the US. The Fed Reserve which cut interest rates 3 times this year, seems intent on waiting for a while before any further action.